Stocks of major food retailers dropped Thursday after Amazon said Whole Foods Market will cut prices on many of its best-selling grocery products in four days.
Stocks of major food retailers collapsed Thursday, erasing at least $10 billion in market value, after Amazon said Whole Foods Market will cut prices on many of its best-selling grocery products in just four days.
That’s when Jeff Bezos’ company is set to close its $13.7 billion acquisition of the high-end food retailer, the largest in Amazon’s history.
Shares of Kroger fell more than 7 percent, Wal-Mart lost nearly 2 percent, Target fell almost 4 percent, Costco lost 4.6 percent, Supervalu and Sprouts Farmers Markets each fell more than 6 percent.
Their combined decline erased about $10 billion in market value in a single day, according to CNBC analysis of FactSet data.
«To get started, we’re going to lower prices beginning Monday on a selection of best-selling grocery staples, including Whole Trade organic bananas, responsibly-farmed salmon, organic large brown eggs, animal-welfare-rated 85% lean ground beef, and more, » Jeff Wilke, CEO of AmazonWorldwide Consumer, said in a release. «And this is just the beginning — we will make Amazon Prime the customer rewards program at Whole Foods Market and continuously lower prices as we invent together.»
Whole Foods has more than 450 locations and is known for selling higher-priced, often organic, produce, while retailers like Wal-Mart have emphasized lower prices and savings for customers.
For example, bananas can cost 99 cents a pound at Whole Foods versus 49 cents at Wal-Mart.
«Over the longer term, I do see Amazon is going to be more competitive in this world, » Joe Feldman, analyst at Telsey Advisory, said on CNBC’s » Power Lunch .» He did note that Wal-Mart and Costco’s share price decline Thursday was «a bit of an overreaction» because of the difference in customer demographic.
Amazon traded 0.2 percent lower amid a broader market decline, but held gains of 27 percent for the year. Whole Foods traded 0.7 percent higher.
Of the six stocks listed above, only Wal-Mart and Sprouts have gained this year, up 13 and 17 percent, respectively.
Consumer staples fell more than 1 percent in afternoon trading, tracking for the group’s worst day since Nov. 30. Kroger was one of the biggest decliners in the stock sector.
— CNBC’s Lauren Thomas contributed to this report.
